How Credit Unions Survived The Crash

 

 

By Ralph Nader

27 February, 2009
Countercurrents.org

 

While the reckless giant banks are shattering like an over-heated glacier day by day, the nation's credit unions are a relative island of calm largely apart from the vortex of casino capitalism.

 

Eighty five million Americans belong to credit unions which are not-for-profit cooperatives owned by their members who are depositors and borrowers. Your neighborhood or workplace credit union did not invest in these notorious speculative derivatives nor did they offer people "teaser rates" to sign on for a home mortgage they could not afford.

 

Ninety one percent of the 8,000 credit unions are reporting greater overall growth in mortgage lending than any other kinds of consumer loans they are extending. They are federally insured by the National Credit Union Administration (NCUA) for up to $250,000 per account, such as the FDIC does for depositors in commercial banks.

 

They are well-capitalized because of regulation and because they do not have an incentive to go for high-risk, highly leveraged speculation to increase stock values and the value of the bosses? stock options as do the commercial banks.

Credit Unions have no shareholders nor stock nor stock options; they are responsible to their owner-members who are their customers.

 

There are even some special low-income credit unions, though not nearly enough to stimulate economic activities in these communities and to provide "banking" services in areas where poor people can't afford or are not provided services by commercial banks.

 

According to Mike Schenk, an economist with the Credit Union National Association, there is another reason why credit unions avoided the mortgage debacle that is consuming the big banks.

 

Credit Unions, Schenk says, are "portfolio lenders. That means they hold in their portfolios most of the loans they originate instead of selling them to investors, so they care about the financial performance of those loans."

 

Mr. Schenk allowed that with the deepening recession, credit unions are not making as much surplus and "their asset quality has deteriorated a bit. But that's the beauty of the credit union model. Credit unions can live with those conditions without suffering dire consequences," he asserted.

 

His use of the word "model" is instructive. In recent decades, credit unions sometimes leaned toward commercial bank practices instead of strict cooperative principles. They developed a penchant for mergers into larger and larger credit unions. Some even toyed with converting out of the cooperative model into the shareholder model the way insurance and bank mutuals have done.

The cooperative model, whether in finance, food, housing or any other sector of the economy,does best when the owner-cooperators are active in the general operations and directions of their co-op. Passive owners allow managers to stray or contemplate straying from cooperative practices.

 

The one area that is now spelling some trouble for retail cooperatives comes from the so-called "corporate credit unions", a terrible nomenclature, which were established to provide liquidity for the retail credit unions. These large wholesale credit unions are not exactly infused with the cooperative philosophy. Some of them gravitate toward the corporate banking model. They invested in those risky mortgage securities with the money from the retail credit unions. These "toxic assets" have fallen $14 billion among the 28 corporate credit unions involved.

 

So the National Credit Union Administration is expanding its lending programs to these corporate credit unions to a maximum capacity of $41.5 billion. NCUA also wants to have retail credit unions qualified for the TARP rescue program just to provide a level playing field with the commercial banks.

 

Becoming more like investment banks the wholesale credit unions wanted to attract, with ever higher riskier yields, more of the retail credit union deposits. This set the stage for the one major blemish of imprudence on the credit union subeconomy.

 

There are very contemporary lessons to be learned from the successes of the credit union model such as being responsive to consumer loan needs and down to earth with their portfolios. Yet in all the massive media coverage of the Wall Street barons and their lethal financial escapades, crimes and frauds, little is being written about how the regulation, philosophy and behavior of the credit unions largely escaped this catastrophe.

 

There is, moreover, a lesson for retail credit unions. Beware and avoid the seepage or supremacy of the corporate financial model which, in its present degraded overly complex and abstract form, has become what one prosecutor called "lying, cheating and stealing" in fancy clothing.

 

Ralph Nader is a consumer advocate and three-time presidential candidate.

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The world's strangest laws

 

Did you know it's illegal in France to name a pig Napoleon? Or that in Ohio you're not allowed to get a fish drunk? Alex Wade celebrates the spirit of the silly season with a list of the world's most ridiculous laws

(Kham/Reuters)

 

25. It is illegal for a cab in the City of London to carry rabid dogs or corpses.
24. It is illegal to die in the Houses of Parliament.
23. It is an act of treason to place a postage stamp bearing the British monarch upside down.
22. In France, it is forbidden to call a pig Napoleon.
21. Under the UK's Tax Avoidance Schemes Regulations 2006, it is illegal not to tell the taxman anything you don't want him to know, though you don't have to tell him anything you don't mind him knowing.
20. In Alabama, it is illegal for a driver to be blindfolded while driving a vehicle.
19. In Ohio, it is against state law to get a fish drunk.
18. Royal Navy ships that enter the Port of London must provide a barrel of rum to the Constable of the Tower of London.
17. In the UK, a pregnant woman can legally relieve herself anywhere she wants – even, if she so requests, in a policeman's helmet.
16. In Lancashire, no person is permitted after being asked to stop by a constable on the seashore to incite a dog to bark.
15. In Miami, Florida, it is illegal to skateboard in a police station.
14. In Indonesia, the penalty for masturbation is decapitation.
13. In England, all men over the age of 14 must carry out two hours of longbow practice a day.
12. In London, Freemen are allowed to take a flock of sheep across London Bridge without being charged a toll; they are also allowed to drive geese down Cheapside.
11. In San Salvador, drunk drivers can be punished by death before a firing squad.
10. In the UK, a man who feels compelled to urinate in public can do so only if he aims for his rear wheel and keeps his right hand on his vehicle.
9. In Florida, unmarried women who parachute on Sundays can be jailed.
8. In Kentucky, it is illegal to carry a concealed weapon more than six-feet long.
7. In Chester, Welshmen are banned from entering the city before sunrise and from staying after sunset.
6. In the city of York, it is legal to murder a Scotsman within the ancient city walls, but only if he is carrying a bow and arrow.
5. In Boulder, Colorado, it is illegal to kill a bird within the city limits and also to "own" a pet – the town's citizens, legally speaking, are merely "pet minders".
4. In Vermont, women must obtain written permission from their husbands to wear false teeth.
3. In London, it is illegal to flag down a taxi if you have the plague.
2. In Bahrain, a male doctor may legally examine a woman's genitals but is forbidden from looking directly at them during the examination; he may only see their reflection in a mirror.
1. The head of any dead whale found on the British coast is legally the property of the King; the tail, on the other hand, belongs to the Queen - in case she needs the bones for her corset.

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Priyadarshan the Malayalam film maker on Slumdog Millionaire quoted in the Financial Times

Priyadarshan Nair, an India film-maker, complained strongly that the film makes a mockery of India. "It's nothing but a mediocre Bollywood film, which has used references from several Hindi films very smartly," he wrote in the newspaper India Today at the weekend.
"India is not Somalia. We are one of the foremost nuclear powers in the world, our satellites are roaming the universe. Our police commissioners' offices don't look like shacks and there are no blind children begging in the streets of ­Mumbai."

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Babri Mosque Demolition: Why On December 6?

 
By Ashok Yadav

21 February, 2009
Countercurrents.org

 

Was it a mere coincidence that the Babri mosque was demolished on December 6? Of course, there are strong reasons to believe that the event was not an act of spontaneous mob frenzy but rather an outcome of a high-level conspiracy. No wonder the issue was utilised by the Sangha Parivar to generate communal euphoria across the length and breadth of the country. Moreover, this euphoria was manufactured and nourished sequentially and saw its logical culmination in the ultimate levelling of the mosque. However, the pertinent question is: what drove the saffron forces to chose this particular date for their heinous act? What was so exceptional about this particular date that it overrode all other options in the 366 days of that year (1992 being a leap year)? A scrutiny of this question, I posit, would unveil the true character of Hindu communalism or Hindutva.

 

As we are all aware the class struggle between the exploiters and exploited sections continues unceasingly in all human societies. Though at certain critical junctures in history this struggle manifests itself in violent forms most of the time it is fought unabated at the psychological level. This psychological war is fought between the collective/folk memory of the people and the institutionalised memory by the oppressed. The strategy of the ruling classes everywhere and at all times has been to efface this folk memory of the people which is nothing but an historical record of the resistance offered by the people and their heroes to the powers that be. Of course, the oppressors are aware that the oppressed sections get more agitated listening to the tyranny meted out to their ancestors than the fact of actual oppression that they face themselves. Hence the powerful use all the instruments at their disposal to erase this collective memory—from the organs of the state to all the institutions of indoctrination (education) and propaganda (media/cinema). They are also often successful at that.

 

On the other hand the subject classes strive to eternalise this collective memory by bequeathing it to the successive generations through its own literature, culture, art and folk traditions. In our own times the autobiographies being penned by Dalit authors exemplify this best. They also celebrate and observe the decisive dates in their history or those associated with their leaders (their birth and death anniversaries for instance) to keep the flame of their cause alive. How this memory of tyranny unleashed against their ancestors inspires the oppressed to do something remarkable can be glimpsed in one of the statements by Vivian Richards, a renowned Black cricketer from Antigua in West Indies. Vivian Richards, as we all know, was not only a sportsman par excellence but also a vocal crusader against racial injustice. He once said: Every member of my team is haunted by the memory of white oppression faced by our ancestors for centuries. When we do lethal fast bowling or bat explosively against them it is as if we are extracting revenge from them for those misdeeds and consequently restoring prestige for our race.(Source: Student Federation of India's journal Student Struggle's issue published sometime in 1984-85. Independent translation based on recall of the quotation. )

 

Hence, we can see how this collective memory often acts as the chief weapon in the armory of the oppressed sections. However, there are certain memories which the powerful can never erase despite their best efforts. In such cases they take recourse to adulterating this memory and channelising it for their own nefarious ends. I contend that on December 6, 1992 when the Babri mosque was razed to the ground similar efforts were made. But I will come back to it later. First a few words on the true character of Hindutva.

 

The paramount feature of the Hindu faith is the caste system. Moreover, the ideology of Hindutva only nurtures and sustains this system. In Gita, which is accorded the highest place in the corpus of Hindu scriptures, God animated as Krishna states that the varna system is His creation. Besides, all the scriptures of Hindu faith unequivocally support the caste system. It can be further asserted that those sitting pretty at the top of the varna hierarchy have their dominance, superiority, privileges, heaven, salvation, or for that matter everything, secure so far as the varna system operates. How the superiority of the twice-born and their social, political, economic and cultural hegemony can be perennially maintained seems to be the primary concern of the sanatana dharma. Otherwise why do proponents of Hindutva go berserk on the question of 27% reservation for the Other Backward Classes (OBC's)?

 

The real history of India is yet to be written. The central role of the struggle against the caste system in the historical development of this land has not yet been rigorously investigated. This will only become a reality once the Dalit-Bahujan masses undergo a process of Cultural Revolution or, dialectically speaking, it is the very writing of this history that will inaugurate the Cultural Revolution for Dalit-Bahujan masses.

 

The history of India is an account of the struggles against the caste system. The emergence of Jainism, Buddhism, Sikhism or the influx of Islamic and Christian faiths and their acceptability would not have been possible but for the caste system. One may also propose that it is this very exploitative system which is responsible for the historical stagnation of the productive forces and development of knowledge and science in this country. This historical stagnation was however, consciously or otherwise, arrested by the advent of the British colonial state. In this respect the formulations of Karl Marx, Raja Rammohun Roy and Jotiba Phule bear remarkable similarity. In the mediaeval ages many a dalit-bahujan took a sigh of relief at the demolition of the Hindu temples by the Muslim invaders as these temples were also centres of social monopoly power which was no less oppressive and exploitative than the state power. In these temples the entry of shudra-atishudra was prohibited quite unlike the mosques, churches. gurudwaras or monasteries which were more or less open to general masses and they could pray there collectively without a thought of high and low pervading caste society. Even during the heydays of the struggle against British colonialism the banner of revolt against social imperialism was hurled high by people like Jotiba Phule, Narayana Guru, Periyar, Shahuji Maharaj and Babasaheb Ambedkar. Organisations like Bihar's Triveni Sangha multiplied in all parts of the country.

 

The developments since Independence also narrate the story of this struggle—the protagonists being Dr. Rammanohar Lohia, Karpuri Thakur, Kanshiram, Annadurai, BP Mandal and VP Singh.

 

The anti-caste proclivities received a great boost when VP Singh government announced its decision to implement the Mandal Commission recommendations. In the wake of this move by VP Singh the challenge posed by Dalit-Bahujan masses to the caste elite multiplied many times. Thus they unleashed the genie of kamandal to counter the politics of Mandal. Advani subsequently stormed the nation on his 'Ram-rath' leaving behind a trail of blood wherever the rath crossed. When Laloo Prasad finally arrested him BJP withdrew support from the VP Singh government thereby 'chastising' him for attempting the unpardonable. Communal polarisation and galvanisation by the Hindutva forces gained momentum resulting in the ultimate demolition of the Babri mosque. No wonder, the 'Brahmin' and Brahminist Prime Minister PV Narasimha Rao kept himself busy with an afternoon siesta on a wintry day and by the time he woke up the mosque had been razed to the ground.

 

There seem to be many reasons behind the demolition of the mosque. First, to counter the influence of Mandal by the velour of demolition. Second, to transform the feeling of defeatism plaguing the Hindu psyche due to repeated defeats at the hands of invaders (a consequence of the divisive caste system one may add) into a feeling of glory. Third, to dilute the social contradictions and caste struggle arising out of the assertion of the dalit-bahujan masses by a wider Hindu resurgence and unity. Fourth, the consolidation of the Hindu vote bank by arousing communal passions for BJP in order to achieve the ideal of the so-called Hindu Rashtra and so on. However, when we investigate the reason behind a particular choice of date (December 6) we are informed of at least one more reason.

 

In the twentieth century the major challenge to Hindutva has been indisputably presented by Dr. BR Ambedkar. This challenge is more ideological than political. Along with Dr Ambedkar two other names can be shortlisted for having contested Hindutva effectively—namely, E.V. Ramaswamy Naicker (or Periyar) and Dr. Ram Manohar Lohia. It is unfortunate that Periyar's influence remained restricted to South India only. Dr Lohia's slogan pichda pawe sau mein sath (let the backward bag sixty out of hundred) effectively challenged the political power of the proponents of Hindutva. The process of social change and consciousness that we witness in North India today, especially in UP and Bihar, would have been scarcely possible without the contribution of Lohiaite ideology. However, one can surely find grounds to critique the contradictions and inconsistencies in his thought regarding Hindu religion, philosophy and tradition. Despite his powerful slogans this lacuna in his thought severely hampers the march of the caravan of social justice towards any meaningful destination. A harmonious integration of Lohiaite and Ambedkarite ideology is therefore imperative to give the much required edge to the politics of social justice.

 

The Saffron brigade trembles when it hears the names of Ambedkar or Periyar. Afterall, it is they who have bitterly exposed the reality of Hindu faith and have established beyond doubt that this faith is nothing but Brahmanism or the varna system. Both urged their followers not to stop before the complete destruction of this religion. While Periyar swithched to atheism for this purpose Ambedkar advocated disowning of Hinduism and adoption of Buddhism respectively. It is another matter that even Buddhism is silent on the concept of God.

 

Despite being a constitutionalist Dr. Ambedkar often finds a pride of place in the league of the world's greatest revolutionaries. He stood up to combat a system that had been reigning undeterred in this country for the last three thousand years. He could not have urged the voiceless and powerless untouchables leading a life worse than animals for attempting an armed insurrection. That is why he was a constitutionalist. By investigating meticulously the Hindu religious scriptures and authoring powerful tracts (like Riddles in Hinduism, Annihilation of Caste and Revolution and CounterRevolution in Ancient India), and, also by such powerful symbolic gestures like setting Manusmriti on fire and articulating and voicing the concerns and demands of the untouchables in round table conferences and such forums, he laid bare the hypocrisy, contradictions and inhumanity of the Hindu religion and society in front of the whole world. He did not even deter from engaging in a vitriolic polemic and conflict with a personality like Gandhi in order to secure an independent identity and place for Dalits in the Indian political landscape. On the one hand he managed to pocket a few concessions for the dalits by making his way into the Constituent assembly, on the other he also criticised the Indian Constitution on various counts in no uncertain terms. When he became the first law minister in independent India, he strived and struggled to ameliorate the condition of Hindu society, and especially the pitiable condition of its women, by drafting the 'Hindu Code Bill' and making efforts to get it passed in the Parliament. However, his efforts came a cropper due to the influence of fanatic Hindus in the Congress party and government which were against modern and radical reforms. Now he saw no point in continuing as a member of Hindu society. During all these years he had been postponing the actualisation of his call to leave Hindu religion that he gave twenty years back. All this time he had been genuinely working at reconciliation with his adversaries. But now he could take it no longer. He converted to Buddhism with lakhs of his followers and reestablished the faith that had been exiled from the country of its origin some fifteen centuries back due to the inexcusable crime of challenging the caste system. In other words, Dr. BR Ambedkar now donned the mantle of a modern Buddha.

 

Until the day the Indian society liberates itself from the tentacles of the caste system his legacy shall continue to inspire the dalit-bahujan masses. It would be a parochial stance if we recognise Ambedkar only as a champion of shudras-atishudras. He is the leader of all Hindus because his primary concern was to liberate the entire Hindu society by breaking innumerable divisive caste walls. The path of liberation, for a Brahmin as well as a scavenger, from this inhumane caste system is ingrained in the theoretical insights of Ambedkar.

 

This is the only reason why Dr. Ambedkar's life, actions, thoughts and struggle pose such a great challenge for Hindutva. His ideology is a guide to action for the dalit-bahujan masses. However, the efforts to destroy his legacy continue to proliferate. It is to meet such sinister objectives that books like Worshipping False Gods are written by Saffron theoreticians like Arun Shourie. Surely, for them a memory which cannot be erased, a legacy which cannot be vanished, can be surely mitigated by aduleration, illusions and sleight of hand pure and simple.

 

On December 6, 1992 when the dalit bahujan of the nation was observing the death anniversary of Dr. Ambedkar, remembering his struggle against the brahminical system for establishment of a society based on equality, fraternity and liberty and taking pledge in his name to carry forward the struggle that Dr Ambedkar waged, at that very moment, quite simultaneously, the Sangha Parivar was engaged in demolishing the Babri mosque with the aid of thousands of its cadres and supporters. A countervailing 'Hindu glory' was being forged opposed to Dr. Ambedkar's memory and legacy. Hindutva was making unholy inroads into the dalit-bahujan psyche generally permeated with Dr Ambedkar's legacy till then. By demolishing Babri mosque an attempt was being made to violate and pollute the great memory of Dr Ambedkar. A conspiracy was being enacted to erect a symbol of Hindutva pride, inherent in the demolition of Babri mosque, parallel to Dr Ambedkar's memory, so that every year when on December 06 the dalit bahujan would assemble to commemorate Dr Ambedkar's life and struggle, the anniversary of Babri mosque demolition would also be there as a parallel force to counter Dr Ambedkar's legacy. The demolition of Babri mosque on the same date as the death anniversary of Dr Ambedkar would never leave the commemoration of Dr Ambedkar's death anniversary as uncontaminated. The demolition of Babri mosque on December 06 was an intense psychological war against the dalit-bahujan which was no less lethal or violent than the organised and frequent pogroms against dalits and Muslims.

 

One may well ask why was Ambedkar's birth anniversary (14 April) not chosen as a date for demolition? The answer is simple. In comparison to his death anniversary his birth anniversary is widely celebrated with much vitality and grandeur. It would have been a risky proposition because then their anti-Ambedkar ideology would have been brought out into broad daylight. They could not have afforded such a big risk at that time. Babri mosque is after all not the last mosque to be levelled. There are other mosques on their hit-list as well. Whenever they find themselves powerful enough to take such a risk they will show the temerity to do so. Why only Ambedkar there are many other icons that give sleepless nights to the Hundutva forces.

 

In the end, the explanation rendered above is purely theoretical. No concrete proof was available for this assumption. However, later I happened to discover a somewhat similar proof in some extracts of Malay Krishna Dhar's book Open Secrets: India's Intelligence Unveiled published in Outlook (Hindi, 7 Feb 2005):

 

" On 25th December K. N. Govindacharya called me on phone and expressed his desire to come over for dinner to my house along with two of his friends…After dinner the conversation continued till midnight. I shivered from what I got to learn from my friends. They gave me sufficient indications that the Sangha Parivar was not obverse to the demolition of the mosque and putting in its place a temple-like structure…Why in December only? I asked. Gurumurthy promptly replied that I should read history once again. Did not Mahmud Gaznavi destroy Somnath temple in December 1025?"

 

It is strange that the author did not ask why only on a particular day in December. It is also possible that the author may have asked the question and would have been promptly replied back that because it is the death anniversary of Dr. Ambedkar, and that he did not share this part of the conversation with his readers for the fear of completely unmasking the mindset of the saffron brigade. Who knows?

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The public may soon forget that there is such a thing as an honest broker

 

Stanford caught out – at long last

Published: February 20 2009 20:01 | Last updated: February 20 2009 20:01
 

 
J.K. Galbraith once proposed a measure of the economic cycle called the "bezzle": the inventory that has been purloined from investors. In fat years, the bezzle grows as auditors relax. In the lean years, it shrinks as investors become cautious. The allegations against Bernard Madoff and, now, Sir Allen Stanford suggest the bezzle is large – but shrinking.
 
Mr Madoff's alleged $50bn Ponzi scheme appears to have been a classic confidence trick. Rather than demanding money upfront, he seems to have encouraged investors by suggesting they pour their cash into his funds gradually. By turning some investors away, he seems to have reassured his customers that they were benefiting from some kind of specialised inside track. In truth, he may just have been building the steadily increasing flow of money he needed to keep going.
 
Sir Allen runs institutions that are alleged to have misled investors about their exposure to risky, illiquid assets. But like a salesman who always drives a new car, Sir Allen made a show of his wealth to inspire confidence. Broiled a brilliant lobster-pink by the Caribbean sun, the Texan Terry-Thomas landed a golden helicopter at Lord's cricket ground and offered a $20m prize for a limited-overs competition hosted at his Antiguan stadium. The caddish billionaire's mere presence was a large part of his companies' guarantee of solvency.
 
There were real warning signs about both men. In both cases, analysts were suspicious of the returns they were claiming. In both cases, these men dominated their companies and used peculiarly inconspicuous auditing firms to check them. Yet so long as they were able to post high and metronomic returns, they evaded serious scrutiny.
 
Indeed, the US Securities and Exchange Commission investigated both men's companies, fining them for relatively minor transgressions – seeming to miss the wood for the trees. The case against Sir Allen was brought only after the public criticisms of a Venezuela-based analyst. Mr Madoff was turned in by his sons. Mary Schapiro, the SEC's new chairman, seems to be inheriting a toothless watchdog.
 
In a complex and opaque industry such as finance, a strong regulator is essential to make sure – at the bare minimum – that market participants are telling the truth. Fears that there are losses across the sector from multibillion dollar thefts that are still waiting to be uncovered by the regulator will exacerbate recent market volatility.
 
A strong overseer is also essential if people are going to have the confidence to invest. If the financial sector is not to be regulated into oblivion after the crisis, moreover, there must be popular acceptance that bankers are worth having. Yet if financial fraud is believed to be tolerated, this will not be possible. The public may soon forget that there is such a thing as an honest broker.

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India's nuclear submarine plan surfaces

 Siddharth Srivastava

NEW DELHI - Expressing fears about cross-border terrorism in the wake of the November 26 Mumbai attack and keeping a close eye on China's military expansion, India announced plans this week to hike its defense budget by 34% to 1.4 trillion rupees (US$30 billion) and last week revealed that its project to build three nuclear-powered submarines is nearing completion.

"Things are in the final stage now in the Advanced Technology Vessel [nuclear-submarines] project. There were [mainly technical] bottlenecks earlier ... they are over now," Defense Minister A K Antony said on February 12.

The Advanced Technology Vessel (ATV) project is part of India's $3 billion plan to build five submarines and complete what it calls
a "triad" of nuclear weapon launch capability - from air, land and sea. India is concurrently developing the K-15 ballistic missile, which can be nuclear-tipped and launched from submarines.

Defense sources have told Asia Times Online that New Delhi has been actively seeking out assistance from France in the implementation of the ATV project, and that Russian engineers are already involved. The sources said that the sea trials of the nuclear-powered submarines should begin this month and that the submarines should be operational within the next three years.

The secretive ATV nuclear backed ballistic missile submarine (SSBN) project began in the late 1970's and is being implemented at a secret dry dock in Visakhapatnam, India's Eastern Naval command base. Observers have said that the submarines are a critical addition to India's weapons capabilities.

In a grim reminder of the possible dangers facing India from the sea, India's Naval chief Admiral Suresh Mehta warned this week that terrorists could smuggle "dirty" nuclear bombs via the nation's ports as they lack adequate security measures. Terrorists also used a sea route to infiltrate Mumbai.

Nuclear-powered submarines with their greater speed, power, range and the length of time they can stay submerged compared to conventional diesel-electric submarines are effective for sudden strikes as well as fast and stealthy protection from attacks.

New Delhi has been concerned about Beijing's strengthening of bilateral ties with Islamabad, particularly given recent tension on sea projects such as at the Gwadar port. China has also been developing ties with Sri Lanka and Myanmar to deepen its control over a complex energy-security conflict being aggressively played out in the region.

Given the ongoing tussle between India and China to control the waters of the Indian Ocean, the New Delhi government has been put under tremendous pressure from the navy to ramp up India's sea power. China has already spoken of creating three ocean-going fleets to patrol the areas of Japan and Korea, the western Pacific, the Malacca Strait and the Indian Ocean.

The ATV project has been in the spotlight as India's other attempt to procure a nuclear submarine this year received a setback when Russia "indefinitely" postponed delivery of the Akula-II class Nerpa nuclear submarine, citing incomplete sea trials and a lack of funds.

Further, the Amur shipyard in Russia's far east, where the sub is being built, is yet to finalize a new team following an accident in November in which 20 members were killed. The accident has led Indian media to describe the submarine as "cursed".

India has been looking at developing underseas capabilities to launch nuclear weapons, after gaining some competence in land-based nuclear delivery platforms for the domestically developed ballistic missiles Prithvi and Agni.

India has already developed a submarine-launched supersonic missile, a modification of the BrahMos cruise missiles, an achievement previously limited to only advanced nations such as the US, France and Russia. Ship and land launched versions of the BrahMos are being introduced in the navy and army.

The state-controlled Defense Research and Development Organization is also undertaking a joint development project with Israel Aerospace Industries to develop a surface-to-air missile which can be launched from land and ships.

Upgrade and renovation of India's navy will be an important aspect of India's US$50 billion defense modernization exercise. Under the plan, the projects code named 75 and 76 entail the production of 24 underwater vessels valued at US$20 billion to meet the challenges across the Indian Ocean.

In 2007, construction of the highly-advanced Scorpene submarine began at the upgraded Mazgon Dock in Mumbai as part of a US$3.5 billion deal for six such French submarines. As the Scorpene deal involves transfer of technology, it should be beneficial for both nations as India gains new technology and French firms gain a possible foothold in the big Indian market.

But significant delays are now expected in India's acquisition of the aircraft carriers Admiral Gorskov from Russia and two that are being developed at home. In early 2007, India purchased the 36-year-old US warship the USS Trenton (re-christened INS Jalashwa) with a gross tonnage of 16,900 tons for US$50 million.

The Trenton is the first ever US warship owned by the Indian Navy and the second largest that India possesses after the INS Viraat aircraft carrier. The Indian Navy plans to add 40 new warships to its fleet and the government plans to invest over 500 billion rupees (over US$12 billion) over the next 10 years on warships.

The government has encouraged the private sector to play a bigger role in the nation's defense, and India's largest engineering and construction firm Larsen & Toubro has announced plans to build defense warships and paramilitary vessels at a proposed facility in Tamil Nadu.

After the rude awakening of the Mumbai terror attacks, others branches of the military are also now pushing for more upgrades and additions.

The Indian Air Force, for example, is seeking 42 fighter squadrons up from the current 32 or 33 squadrons (each with 14 to 18 jets), to offset the phasing out of older Russian planes. The army, which has been allocated a large piece of the military outlay, is seeking more tanks and howitzer field guns.

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Former nun tells of sex and suffering inside Indian convent

 

By Andrew Buncombe in Delhi

 

Catholic Church stung by autobiography recounting harassment and abuse

 
A former nun's tell-all story which details illicit relationships, sexual harassment and bullying in the convent where she spent three decades is causing ructions in the Catholic Church in the south Indian state of Kerala.
 
In Amen – an autobiography of a nun, Sister Jesme says when she became a nun she discovered priests were forcing novices to have sex with them. There were also secret homosexual relationships among the nuns and at one point she was forced into such a relationship by another nun who told her she preferred this kind of arrangement as it ruled out the possibility of pregnancy.
"I did not want to make this book controversial. I want to express my feelings and to explain what happened to me... I want people to know how I have suffered," she told The Independent last night, speaking from the town of Kozhikode. "People say that everything is OK, but I was in the convent and I want them to know what goes on. I have concerns for others."
 
Sister Jesme, who quit last year as the principal of a Catholic college in Thrissur, alleges senior nuns tried to have her committed to a mental institution after she spoke out against them.
 
In her book, she says that while travelling through Bangalore, she was once directed to stay with a purportedly pious priest who took her to a garden "and showed me several pairs cuddling behind trees. He also gave me a sermon on the necessity of physical love and described the illicit affairs that certain bishops and priests had". The priest took her to his home, stripped off his clothes and ordered her to do the same.
 
She also alleges that while senior staff turned a blind eye to the actions of more experienced nuns, novices were strongly punished, even for minor transgressions. She was not allowed to go home after she learnt her father had died. "I was able to see [the body of] my father barely 15 minutes before the funeral," she writes. "The [response] of the superiors was that the then senior sisters were not even lucky enough to see the bodies of their parents."
 
When she resigned as a college principal, she claimed convents had become "houses of torture", saying: "The mental torture was unbearable. When I questioned the church's stand on self-financing colleges and certain other issues, they accused me of having mental problems. They have even sent me to a psychiatrist. There are many nuns undergoing ill-treatment from the order, but they are afraid of challenging it. The church is a formidable fortress."
 
The allegations are not the only controversy to rock the Catholic Church in Kerala. Last summer, a 23-year-old novice committed suicide and left a note saying she had been harassed by her Mother Superior. Reports suggest there have been a number of similar suicides. And in November, police in Kerala arrested two priests and a nun in connection with the killing of Sister Abhaya in a notorious 1992 murder.
 
Last night, a spokesman for the Syro-Malabar order of the Catholic Church, Dr Paul Thelakkat, dismissed Sister Jesme's allegations as a "book of trivialities". "It's her experiences, but these are things that might creep into a society of communal living," he said. Asked if the church would be shocked by the allegations, he replied: "Absolutely not. The church knows about these things."

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